Disney’s TV Networks Stand Apart, Says Analyst

By Avi Salzman

Lazard Capital Markets analyst Barton Crockett upgraded Walt Disney (DIS) to Buy on the strength of its television networks, including ESPN and the Disney Channel. Other media networks such as Viacom (VIAB) are facing headwinds from ratings challenges, Crockett argues, but Disney is in a stronger position.

“Because of ESPN’s dominant position in sports and Disney’s momentum in kids’ content we see less reason to worry about ratings issues than conglomerate peers, making Disney a cleaner call on the secular positive of program fee growth.”

The company also has significant excess cash, giving it flexibility, Crockett wrote.

“Moreover, we see more untapped cash capacity at Disney than its peers – an insurance policy, in our view, as this cash could be used to boost earnings either via share repurchases or acquisitions.”

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